1. Heard Ms. Upasna Agarwal, Advocate holding brief of Sri Rahul Agarwal, learned counsel for the petitioner and learned Standing Counsel for the State-respondents.

2. The present petition has been filed by the petitioner against the order dated 6.1.2021 passed by the Additional Commissioner, Grade-2 (Appeal)-I, Commercial Tax, Kanpur. By that order, the first appeal authority has partly allowed the assessee’s appeal and reduced the penalty treating the petitioner to be the owner of the goods.

3. Opposing the writ petition, learned Standing Counsel would submit that the appeal authority has heard and decided the appeal in entirety after taking note of the entire submissions advanced by the petitioner and therefore, the order does not suffer from any infirmity.

4. In the first place, it may be noted that the present writ petition has been entertained against the order of the first appeal authority and is being decided at present as the Tribunal has yet not been constituted. As to the submissions advanced by learned counsel for the petitioner, they appear to be well founded. Though the appeal authority has referred to the submissions advanced by the petitioner, it has not offered any reasoning to reject the same. The only reason offered and thus recorded in the impugned order is with respect to the alternative plea raised by the petitioner that it was the owner of the goods and therefore if at all, it was liable to penalty under Section 129(1)(b) of the Goods and Services Tax Act, 2017, as the owner.

5. It is most fundamental to the exercise of appellate jurisdiction that the appeal authority must consider and decide, after recording reasons, each ground of appeal raised and pressed before it. It would be one situation where an assessee though raised more than one ground of challenge may press only one or the other ground at the time of oral submissions. In that event, clear recital must be contained in the order passed by the appeal authority, to that effect.

6. In the present case not only the appeal authority has not made any observations to the effect that the assessee had limited his appeal to the alternate ground but the appeal authority has copiously referred to the entire submissions advanced by the petitioner including submissions advanced on the merits of the matter. Yet, it has not dealt with or decided the same. Such a course adopted by the appeal authority is not productive or useful either for the purposes of adjudication made by it or for the purposes of testing the correctness of the adjudication made by such appeal authority, by the higher forum.

7. The grounds of appeal may be voluminous and the arguments elaborate. However, for the purposes of recording reasons, it is the exact nature of the objection or ground raised that must be recorded and noticed as may disclose to the higher forum, the precise application of mind made by the appeal authority. By referring to the entire memo of appeal or a written argument, the appeal authority not only makes it difficult for itself to decide the exact issue raised but also makes it difficult for the higher forum to examine the correctness of the adjudication made by the appeal authority.

8. Therefore, it was incumbent upon the appeal authority to formulate the exact points of decision that became necessary to be resolved in view of the submissions advanced before it and to express them in clear language. Thereupon, the appeal authority was obliged to offer its reasons to decide those issues based on the arguments advanced before it- to either accept or reject each ground of appeal, so pressed. Once reasons had been recorded in that manner, the appeal jurisdiction could be said to have been properly exercised.

9. In the present case, the course adopted by the appeal authority leaves a lot to be desired. The appeal authority appears to have only considered and offered reasons to accept the alternate plea made by the petitioner but it has not made any application of mind to the main plea that there was no infraction of law and the penalty provisions were not attracted. In absence of any discussion on that issue, the order passed by the appeal authority cannot be sustained to that extent and is hereby set aside.

10. The consideration made by the appeal authority on the alternate issue would become operative only in the event it chooses to reject the main submission advanced by the petitioner. Accordingly the matter is remitted to the appeal authority to pass fresh order keeping in mind the observations made above.

11. It is expected that the aforesaid proceedings shall be concluded as expeditiously as possible preferably within a period of three months.

12. With the aforesaid observation, writ petition is disposed of.